Australia starts shipping uranium to China

21 November 2008

Australia's minister of resources and energy, Martin Ferguson, has welcomed the first shipment of uranium to China, following the earlier signing of a bilateral safeguards agreement between the two countries.

Energy Resources of Australia (ERA) announced sales contracts with China following the signing of bilateral treaties enabling exports. Details about the shipment to China - including the quantity and destination - were not disclosed. Uranium is currently mined at three locations in Australia: BHP Billiton's Olympic Dam and Heathgate Resources' Beverley mine, both in South Australia; and ERA's Ranger mine in Northern Territory.

In April 2006, Australia and China signed two bilateral safeguards agreements that would open the way for Australia to supply uranium to China's growing nuclear energy industry. The Nuclear Material Transfer Agreement and Nuclear Cooperation Agreement put in place strict safeguards to ensure that Australian uranium supplied to China will be used solely to produce electricity. The Nuclear Transfer Agreement allows Australian uranium to be used in designated Chinese nuclear facilities, while the Nuclear Cooperation Agreement allows, among other things, for China to explore for uranium in Australia.

At the time, Australia's resources minister Ian Macfarlane said that exports to China would not start for at least two years because Australia's total uranium production was fully committed until at least 2008.

Both countries ratified the agreement through an exchange of Diplomatic Notes in Beijing in January 2007. The agreements entered into force 30 days after ratification. Accordingly, the legal framework for Australian uranium producers to commence exports to China was subsequently put in place.

Australian uranium will be used only at civilian facilities covered by China's safeguards agreement with the International Atomic Energy Agency (IAEA) and these facilities will be eligible for inspection by the IAEA.

Ferguson said: "Australia has the strictest uranium export safeguards policy in the world and we will only sell to countries that are NNPT signatories and have a bilateral safeguards agreement with Australia."

Economic and environmental benefits

He noted, "It is becoming increasingly clear that concerns relating to energy security and climate change are set to drive a significant increase in global demand for uranium in those countries which rely upon nuclear power as a clean energy source. So with more than one-quarter of the world's uranium resources, Australia is well-placed to benefit economically from uranium mining and uranium exports."

Ferguson added, "We also have an obligation to be part of the solution to the environmental consequences of rapid economic growth on our doorstep in China and the Asia Pacific."

"The Australian government supports the further development of uranium mining to provide a significant long-term economic benefit to Australia and also make a major contribution to the global effort to reduce greenhouse gas emissions and urban air pollution," he said. "Expansion of the uranium industry could generate up to A$17 billion ($11 billion) in GDP for Australia to 2030 and avert up to 15 billion tonnes in carbon emissions through the use of uranium in the global power sector."